ITU Telecommunication
Development Bureau (BDT)
Report of the ITU Regional Seminar on Costs and Tariffs for the Member States of the
Regional Group for Africa (SG3RG-AFR)
Cotonou, Benin, 8 – 9 May 2012
I.
Introduction
The ITU Regional Seminar on Costs and Tariffs, which was organized jointly by the Telecommunication
Development Bureau (BDT) and the Telecommunication Standardization Bureau (TSB) in collaboration with
the Autorité Transitoire de Régulation des Postes et Télécommunications du Bénin (ATRPT), was held in
Cotonou, Benin, on 8 and 9 May 2012 and followed by the meeting of Study Group 3 Regional Group for
Africa (SG3RG-AFR).
98 participants from 30 countries took part in the meeting. The complete list of participants is available at:
www.itu.int/ITU-D/finance.
II. Opening ceremony
The opening ceremony was presided over by Mr Wilfrid Martin, Director of the Minister’s Office,
representing the Minister of Communications and ICT. With him were: Mr Firmin Djimenou, President of
the ATRPT; Mr Makhtar Fall, Head of the Regulatory and Market Environment Division of BDT; and
Mr Abossé Akué-Kpakpo, Chairman of SG3RG-AFR.
In his address, Mr Martin thanked the ATRPT and its staff for their excellent work in developing the ICT
sector in Benin. The country’s active involvement in the meeting attested to the prominent role played by
Benin in Africa’s ICT sector.
Mr Djimenou welcomed the delegates and thanked them for attending. The ATRPT was pleased and
honoured to host the countries of Africa and discuss topics of great current importance with a view to
making ICT services available to the public at the lowest possible cost.
Mr Fall, speaking on behalf of the Secretary-General of the International Telecommunication Union and the
Directors of TSB and BDT, warmly thanked and paid tribute to the authorities of Benin and the ATRPT for
hosting the important ITU events now taking place.
Mr Abossé Akué-Kpakpo thanked the Benin authorities for the facilities that had been made available and
commended ITU for making appropriate arrangements to facilitate the participation of the delegates and
for making high-level experts available.
III. Election of seminar officers
The seminar elected the following officers:
•
•
•
Chairman: Mr Romain Abilé Houéhou (ATRPT)
Vice-Chairman: Mr Abossé Akué-Kpakpo (SG3RG-AFR)
Rapporteur: Mr Luc Boko (ATRPT)
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IV. Adoption of the agenda
Owing to difficulties in connection with the travel arrangements of one of the ITU Experts, the order of
sessions 5 and 6 was inverted. The agenda thus amended is available at the ITU website given below.
V. Summary of the discussions
All the presentations are available at the ITU website: www.itu.int/ITU-D/finance.
V.1
Sessions 1 and 2: Establishment of Internet exchange points (IXPs) and experiences of countries
with international Internet connectivity (IIC).
Presenter: Mr Mwangui Michuki
Panelists for country experiences:
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Ms Pauline Tsafak Djoumessi, MPT, Cameroon;
Mr Marcellin Ilougbade, Executive Secretary, ATRPT Benin;
Ms Marième Thiam Ndour, MPT, Senegal.
Mr Mwangui Michuki gave a definition of an Internet exchange point (IXP) before describing the current
situation with regard to international Internet connectivity in Africa. By the end of 2012, Africa would have
a total submarine cable capacity of 25.8 Tbps. There were currently 26 IXPs in Africa of which 20 were
operational. There were currently no IXPs in Central Africa. Studies had shown that only 1 per cent of
African traffic was made up of local traffic, the remaining 99 per cent being international. In conclusion, he
showed that it was now possible in Africa to establish regional IXPs by selecting countries with a number of
submarine cable landing points. Examples included Senegal, Egypt, Kenya, Nigeria and South Africa.
•
Country experiences of IIC
Presentations were given on the experiences of three countries: Cameroon, Benin and Senegal.
Ms Pauline Tsafak presented the situation of Cameroon. She gave an analysis of the Internet access value
chain to show the efforts that had been made and the challenges still facing Cameroon and all of Africa in
terms of access to international broadband Internet. She also described the experiences of countries such
as Chad and Sierra Leone. In her view, lowering IIC costs would depend on a combination of political,
regulatory, economic and infrastructure factors at the national, regional and international levels.
The experience of Benin was presented by Mr Marcellin Ilougbade of the ATRPT. He presented the current
situation with regard to the optical fibre infrastructure in Africa, before focusing on international Internet
connectivity in Benin. Lastly he set out the policy for the development of Internet access in Benin and the
project for the ACE submarine landing station in Benin in 2012.
Ms Marième Ndour of Senegal presented the situation of IIC in Senegal and the roll-out of terrestrial
optical fibre systems. At the national level, the available international Internet bandwidth was currently 10
Gbps and the aim was to raise that to 12 Gbps by the end of 2012. In order to reduce costs of Internet
access in the country, there were plans to set up IXPs and develop local content.
Mr Fall reported on the study undertaken by two ITU experts on IIC and invited participants to examine the
report and submit comments and observations as soon as possible.
Following these presentations, participants made comments and asked questions.
It was noted that setting up an IXP was not expensive. It sufficed for the national stakeholders to agree on
the conditions of implementation. In order to set up a local IXP, all that was needed was at least three
Internet access providers in a given country. For a regional IXP, on the other hand, a country needed to
have a number of submarine cable landing points. In conclusion the seminar adopted recommendations to:
•
ensure the development of national backbones and intra-African fibre-optic networks in order to
improve connectivity between countries and enhance traffic flows; and
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•
V.2
pursue the creation of national and regional Internet exchange points in order to keep national and
regional traffic at the national and regional levels.
Session 3: Pricing of broadband services
•
•
Presenter: Mr Harm Aben, ITU Expert
Country experience panelist: Mr Franck Dickodet, ATRPT, Benin
Mr Harm Aben, ITU Expert, in his presentation gave some information on broadband pricing, affordability
of services and market development, the impact of regulation, the best way to regulate new services, and
the definition of pricing policies.
Mr Franck Dickodet then presented the broadband Internet tariffs in force in Benin.
Following the presentations, it was noted that the cost of broadband was still very high in Africa compared
to other continents.
The major debate today was not just about mobile telephony but also about broadband. In Africa, it was
essential to concentrate efforts on the development of broadband Internet. Those services offered
enormous advantages for the public.
ITU took the opportunity to inform participants of a study it had carried out to assist regulators in
regulating broadband services. The document, Regulating broadband prices, is available on the ITU site:
www.itu.int/ITU-D/treg/broadband/index.html.
V.3
Session 4: The impact of social networks
Presenter: Mr Makhtar Fall, BDT
The presentation showed that development of broadband had a positive impact on social networks. At the
level of the African continent, efforts would be needed to support broadband penetration and facilitate
access to terminals. Regulators faced a number of challenges as a result of technological advances and the
strong growth of social networks. Participants expressed the view that the mandate of regulators was
changing to take account of the new issues in the sector such as the popularity of social networks.
Statements made by participants suggested the need to move on from technical (or traditional) regulation
to more flexible and development-oriented regulation.
In conclusion, and in order to facilitate a large-scale deployment of broadband services, it was
recommended that countries that had not already done so should draw up and adopt national broadband
funding and implementation plans.
V.4
Session 5: Pricing of international roaming services
Presenters:
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Mr R. Guellouz, ITU Expert
Ms Aminata Dramé, Sonatel
Mr Vikram Raval, GSMA
Mr Guellouz presented the results of the study on roaming in Africa commissioned by the African Union.
The presentation showed that roaming in Africa was very expensive. There were unfortunately no
adequate data to assess the phenomenon and its impact. The speaker also noted a lack of transparency in
setting roaming charges. Factors that complicate the roaming situation in Africa included:
•
•
the range of payments (widely fluctuating exchange rates);
the difficulty of influencing the high charges.
He noted that the European Union had enacted directives on roaming, a process that had followed from a
political and economic decision to establish ground rules, and on that basis identified four management
strategies that could improve management of roaming in Africa.
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Ms Aminata Dramé presented the experience of Sonatel in the area of preferential roaming, a preferential
pricing mechanism applied by the operator through the Orange Zone offer. There had been some problems
with that offer as a result of surcharges on incoming international calls in Senegal in 2011. The speaker
emphasized the difference between a preferential roaming offer and a “one network”.
The presentation by Mr Vikram Raval gave an overall view of roaming in Africa, regional challenges for
developing the market, market trends and opportunities, the risks of regulation, and a number of
recommendations.
The statements made by participants suggested that there was a need for joint discussion in order to find
ways of substantially reducing roaming prices in Africa. In the meantime, provisions would be needed to
encourage operators to make roaming charges and conditions more transparent for consumers.
Furthermore, it was urgently necessary to reduce roaming costs to a significant degree and to require
operators to provide consumers with details of prices and other information on roaming.
V.5
Session 6: Taxation of telecommunication services / taxation of international incoming traffic
Presenters
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Ms Pauline Tsafak Djoumessi, Ministry of ICTs, Cameroon
Mr Saliou Touré, Sonatel, Senegal
Mr Vikram Raval, GSMA
Mr Luc Boko, ATRPT, Benin
All the presentations raised the question of funding the development of telecommunications in developing
countries and how to ensure that investors had a good return on their investments while providing
affordable services for consumers and maintaining an adequate level of revenue for governments.
A number of different taxes or licensing fees are set by States, the main ones being:
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Telecommunication sector licence fees
Taxes on incoming international traffic
Taxes and duties on equipment.
In the view of Mr Saliou Touré, imposing taxes and duties in Senegal had led to negative consequences
including an increase in the share received together with a substantial drop in traffic volumes.
However, the good news for Senegal was the fact that the Government had just approved a decree
abolishing surcharges on incoming international traffic, although the rate of tax on profits now payable by
telecom operators had been increased from 25 to 35 per cent.
The presenter concluded with a number of recommendations including the following:
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Operators should be subject to specific requirements regarding network coverage, price
reductions, innovative services and measures to support the ICT sector.
A fiscal policy is needed that will encourage development of ICTs and have more beneficial
direct and indirect effects on economies than excessively high taxes, which hold back growth.
The presentation by Mr Vikram Raval looked at taxes in the mobile telephone sector and their adverse
impact. Reducing those taxes led to an increase in the rate of mobile penetration and brought considerable
benefits to the public, the business community and governments. To achieve that goal, governments
needed to seek optimal tax rates. In the view of Mr Luc Boko of ATRPT, Benin had established taxes on
communications in order to protect the telecommunication industry from negative factors such as:
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the proliferation of illegal operators and “grey channels” not subject to any fiscal control; and
loss of foreign currency revenues from incoming international calls.
In conclusion the following recommendations were made:
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States should be encouraged to limit taxes on telecommunication services;
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V.6
at the regional level the main taxes on telecommunication services should be harmonized;
operators should be encouraged to pursue investment in networks and services in order to
support the development of African economies;
a fiscal policy was needed to encourage the development of ICTs by ensuring a good return on
investment for operators and affordable prices;
it was important to avoid shifting the costs of taxes on to the end consumer;
requirements had to be established for operators with regard to network coverage, price
reductions and innovative services;
ITU must continue to study the question of taxation in TSB Study Group 3 and put forward
recommendations on best practices.
Session 7 : Number portability / unbundling
Presenters:
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Mr Yaw Boamah Baafi, NCA, Ghana
Mr Seyni Malan Fati, ARTP, Senegal
Mr Yaw Boamah Baafi presented the experience of Ghana in the area of number portability. Portability was
now established and developing, to the benefit of the sector. The NCA had established an effective
regulatory framework in collaboration with all the sector’s stakeholders. Participants considered the case of
Ghana to be of great interest for other African countries.
Mr Seyni Malan Fati presented the different existing types of unbundling (partial unbundling and total
unbundling), and a benchmark on the implementation of unbundling in a number of countries.
Statements by participants and the replies from the presenters reflected the fact that local loop unbundling
was crucial to the development of the sector in developing countries such as those in Africa.
V.7
Session 8: Economic aspects and costing of NGNs
Presenter : Mr Harm Aben, ITU Expert
Mr Harm Aben presented the results of a study commissioned by ITU on the economic aspects of NGNs. He
noted that there were tools (cost models) for determining the costs of NGN services. With regard to the
economic aspects of NGNs, regulation should involve the development of a model based on best practices,
such as the “bottom-up LRIC cost models’’, which would ensure good returns for investors. Regular market
analysis was needed and the model had to be adapted accordingly.
V.8
Session 9 : Regulation and challenges of VoIP
Presenter : Mr Abossé Akué-Kpakpo, Chairman of SG3RG-AFR.
The presenter recalled that VoIP meant voice transmission using the Internet protocol (IP), which was also
referred to as Internet telephony and took one of three forms, namely, PC to PC, PC to telephone and
telephone to telephone. Comparing the switched and IP networks, he argued that only the switched
network offered a high level of reliability and voice quality in real time.
The major technical challenges related to:
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quality of service in terms of transmission times, jitter, and echo, which were not always
adequately dealt with on the IP network;
loss of packets in routers in the event of congestion.
Three possible solutions were advocated: definition of classes of service; increasing the bandwidth; and
increasing the processing power of routers.
From the economic point of view, one likely consequence of regulation of VoIP was loss of turnover
resulting from the accounting rate in the case of fraudulent connection.
In conclusion the speaker presented his own approach to the regulation of VoIP.
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Regulation should cover the commercial provision of services to the public. It should not cover PC to PC
services, or PC to telephone and telephone to PC. Similarly, provision of the service on a private basis
should not be regulated.
The system adopted could involve licensing or formal authorization. All the market stakeholders had to be
protected in order to guarantee the development of the sector.
V.9
Session 10: Preparation for WCIT-12
The final information session was introduced by Mr Fall. The presentation focused on current work at ITU
to prepare for the World Conference on International Telecommunications, a major conference which
would be held in Dubai from 4 to 14 December 2012. In the absence of the delegate from the UAE, the
presentation of common African proposals would take place during the meeting of the tariff group.
V.10
Group discussion and conclusions
The session included a “round the table” session to hear proposals and suggestions for possible topics for
discussion at the next seminar. The main proposals were as follows:
1. The issue of cybersecurity and development of CIRTs
2. Fiscal pressures on the telecommunication sector
3. Internet connectivity: a benchmark for broadband access costs (obtaining the various cost elements
for the various offers in each country)
4. The impact of regulation on the telecommunication sector: regulatory pressure
5. The impact of Internet development on the development of voice communications
6. Problems regarding adherence to quality of service by operators in Africa
7. Consumption of IP addresses by Africa
8. Conducting a study on the situation with regard to taxation of telecommunications services in
Africa: the study could be endorsed at the next session of the Regional Group
9. Transparency in telecommunication/ICT tariffs among operators in Africa.
10. Possible activities by regulators to ensure access to limited resources – for example, cost-based
access to submarine cable systems
11. The role of mobile telephony in ensuring full coverage of a country including the provision of new
and innovative services on mobile networks (for example, mobile payments, cash transfers etc.)
12. Separation of incumbent operators into wholesale (“NetCo”) and retail (“RetCo”) companies to
facilitate government investment in NGN infrastructures (and investment from other sources such
as the World Bank)
13. Initiatives to stimulate demand for broadband services: training, online administration, e-learning,
and so on.
ITU indicated that the concerns raised by participants would be addressed through an invitation to submit
comments on the discussion forum provided for that purpose on the ITU site, and priority questions would
be tabled for consideration in forthcoming Regional Group studies.
VI. Closure
The next BDT seminar on costs and tariffs together with the SG3RG-AFR meeting was provisionally planned
for the first half of 2013 in a country yet to be determined. The group invited Egypt, Burundi and Gabon to
consider hosting the event in 2013.
The seminar thanked Mr Romain Abilé Houéhou of ATRPT for his capable chairmanship, thanks to which it
had been possible to complete the agenda within the time allowed and with excellent results.
Closing the discussions, Mr Romain Abilé Houéhou thanked all the presenters and especially the ITU Experts
for their high-quality presentations over the course of the two-day seminar, and all the seminar
participants for their diligence and active participation in the debates.
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